K. R. v. Unifund Assurance Company, 2019 CarswellOnt 7818

On August 19, 2017, the applicant suffered a devastating accident that resulted in him slipping into a coma until he passed away one year later. His family had requested reimbursement of legal fees amounting to $9,210 incurred to obtain a guardianship order; however, this was refused by the insurer.

The applicant argued that the costs for guardianship were a “rehabilitative benefit” under sections 16(1) and 16(3)(l) of the SABS, relying on the 2005 decision in Stukic (Litigation Guardian of) v. Personal Insurance Co. of Canada, [2005] O.J. No. 3325. According to the court's decision, expenses incurred in obtaining a guardianship order for a catastrophically impaired person can be paid through s. 15 of the prior version of SABS (now referred to as s. 16).

The respondent contended that the legal fees did not constitute “rehabilitative benefits.” They argued that the new s. 15 was more restrictive than its predecessor, restraining access to the activities and measures listed in s. 16(3). Depending on the amended s. 16(3)(l), insurers must agree that goods and services, apart from those listed in s. 16(3) are vital for an injured person's recovery process. This amendment is of paramount importance to ensure expedited restoration to optimal health for individuals with disabilities or injuries sustained due to unforeseen circumstances.

According to the LAT's findings, reimbursement of the legal fees was not granted since the applicant did not submit a treatment plan in advance as required by Section 38(2). Whether such expenses fit within the definition of a “rehabilitative benefit” under SABS remained undetermined. Yet there appears to be an opportunity for repayment of guardianship order-related legal fees if:

1. a treatment plan is first submitted, or notice is given by the insurer that they will pay the expense without a treatment plan; and
2. the insurer agrees this is a “rehabilitative benefit” which falls under s. 16(3)(l).

Read the full decision: K. R. v. Unifund Assurance Company, 2019 CarswellOnt 7818